Rumor: Video Cameras Coming To iPods, Too

Within the first week of Apple's new iPhone 3GS being available, YouTube reported a 400% increase in mobile video uploads. Now TechCrunch reports a rumor that the next generation of iPods Touch and Nano will have video cameras. If so, the Google-owned site could soon be on the receiving end of a lot more one-the-go content.

This is bad news for Flip video cameras and their ilk. But it's also potentially bad news for YouTube and its bid to reach profitability. Here's why: YouTube users are already uploading 20 hours of video a minute to the service and, thanks to dead-simple, one-touch uploads on iPhones and iPods, that will quickly increase. Of course, these are precisely the videos that YouTube can't monetize and that advertisers don't want. As of this spring, YouTube had sold ads against only 9% of videos in the U.S.

Sure, more uploads will increase YouTube's market dominance, but the user-generated video market has little if any advertising dollars pursuing it. Meanwhile, YouTube is spending $83 to $375 million on bandwidth and storage per year, depending on which estimate you believe.

Further, more user-generated material makes it harder for YouTube to direct viewers to the ad-supported video that could, one day, pay its bills.

So, how beneficial is a glut of spur-of-the-moment video uploads of people crushing soda cans or a friend's recent wedding? Will marketers be clamoring to put their ads next to a majority of these mobile-video uploads? Probably not.